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The Stock Market in March

Since 1984 the UK stock market has had an average return in March of 0.5%; and in 18 of those 31 years (59%) the month’s returns have been positive. This places March seventh in the performance ranking of calendar months for the market. With this the UK is inline with international markets: March ranks 6th on average for 70 world markets (although it has the distinction – along with November – of not being the strongest month for any of the 70 world markets).

However, in recent years share price performance in March has deteriorated. Such that since year 2000 the average month return has slipped to 0.3%, and – as can be seen from the accompanying chart – the market has fallen more often than risen this month. Last year the market fell 3% in March.

Average March

The general trend for the market in March is to rise for the first three weeks and then fall back in the final week – the last week of March has historically been one of the weakest weeks for the market in the whole year.

One characteristic of the early part of the year is that medium cap stocks tend to strongly out-perform large caps. March marks the final month of this period: on average the FTSE 250 index has out-performed the FTSE 100 Index by 0.9 percentage points this month.

Shares

In the last ten years the FTSE 350 shares that have been strong in March have been: Berendsen, Cobham, Intertek Group, Restaurant Group, and Victrex; while The shares that don’t seem to like March are: HSBC, PZ Cussons, Renishaw, Royal Bank of Scotland, and Smiths Group. And it could also be noted that gold has historically been weak in March.

Diary

This is another busy month for company announcements: the busiest for FTSE 250 companies in the year with 74 companies announcing their prelims this month (along with 29 FTSE 100 companies).

The results of the quarterly FTSE 100 index review will be announced on the 4th. Elsewhere, there will be the MPC interest rate announcement on the 5th, the Chancellor’s Budget on the 18th, the FOMC announcement on the 17th, and it’s triple witching on the 20th, so be on the lookout for increased volatility on that day.